6 ms·

I like thinking about shares as a virtual currency. Shareholders are speculating on that currency, and the company is trying to increase its value. Companie

I like thinking about shares as a virtual currency. Shareholders are speculating on that currency, and the company is trying to increase its value. Companies can inflate or deflate this currency depending on their performance, perceived potential or by issuing new shares. I consider myself a fairly smart person, who had a reasonable grasp on the basics of financial markets, currencies, etc. That simple paragraph just triggered a huge light bulb moment for me. It's suddenly a lot easier to reason about stocks, etc, than it was 5 minutes ago...

AsymetricCom 13y ago
We should start a thread about how ignorant you were before this awesome guide. I'm sure we can talk about all sorts of stupid things people believe while managing to learn nothing beyond the scope of the very basic article.
- pistle 13y ago
  I liked how candid they were in their post and then you made all my malcontent proclivities surface. Now, I'm out to pile on and ruin their day as well. Blood in the water.
- JshWright 13y ago
  Apparently I've triggered some deep seated angst... Let me try to clarify what I meant, and maybe you'll feel better? This post didn't present any new 'facts' for me. I was already aware of all the details he explained (and most, but not all, of the implications of those details). My point was simply that by framing shares as currency presented them in a way that I had never considered before, and that comparison caused a number of other things to 'click.' My apologies if my learning offended you...
  - adwf 13y ago
    I think it's safe to say he's just being unpleasant for the sake of it. The old adage of "If you've got nothing nice to say, don't say anything at all." springs to mind. I thought that shares as currency was an interesting analogy to draw too. Although I guess when you get down to it, anything that's reasonably fungible can be considered currency if you feel like it.
    - AsymetricCom 13y ago
      We should definitely not criticize, yes, unless we can provide some kind of positive feedback. I agree. I like how the article had good words in it. We should endeavor to make more articles with good words.
  - AsymetricCom 13y ago
    Not at all, now that I've learned about your learning, we can all discuss how happy that makes us feel. It's a win-win. Wait, maybe if there was a higher context to share our approval of the article without distracting away from its content? Like some kind of high-level rating system that was enforced through a framework of some sort and presented as a low-friction indicator of the quality of the article? We could even improve it by presenting the highest quality articles above the fold. Of course then content that appealed to the lowest common denominator would become the most approved, and people could congregate around shared understanding and beliefs, further cementing those ideas as the "right ideas". Only if there were some social rules that would prevent this "circle jerking" behavior that causes forums to devolve into roaming bands of up-vote brigades. We could start by not "circle jerking" about the quality of the article, we could probably go a long way toward reducing congratulatory posts that celebrate elementary-level understanding of economic systems, and in turn, encourage feel good comments that are up-voted because people agree with them instead of them actually contributing anything.
    - JshWright 13y ago
      It seems I'm woefully ignorant in the ways of online forum posting... I had assumed that excerpting a specific portion of TFA and highlighting why I found it particularly insightful would have been germane to the conversation thread. If only there was a way you could have expressed your opinion that my comment didn't add anything to the conversation without resorting to sarcasm and obtuse rhetoric... (Unless you haven't crossed the 'able to down-vote threshold yet... in which case, no worries).
    - seefriek 13y ago
      Will that do anything about preventing "condescending fuckwit" behavior? I'm betting not.
    - kibibu 13y ago
      Are you ok? You seem inordinately upset about someone pointing out a particular point in the article that resonated with them.
    - trg2 13y ago
- MagicWishMonkey 13y ago
  I bet you're a real blast at parties, aren't ya?
  - balls187 13y ago
    I hired him for our company's holiday party.
icedchai 13y ago
Curious... How did you think about stocks previously?
- JshWright 13y ago
  Simply as an 'ownership stake' in a company. It was easy to see how the value of the stock was tied to the fate of the company, but the comparison to currency made the risks of e.g. dilution (as compared to inflation in a currency) much more obvious.
yajoe 13y ago
Yes, many public stocks on major exchanges are just other forms of currency. It just depends on whether the underlying asset is highly liquid (which implies easy to trade, confidence it will exist in short and long terms, etc). I would humbly submit not to get hung up on the word 'virtual' since the practice of using stocks as a liquidity source (and at times to actually print money) have been done a few times in the past. My favorite example is from the 1890s: Amalgamated Copper Summary: http://www.jstor.org/stable/1884999 http://www.jstor.org/stable/1884999 Book describing the process of getting banks to print money by ficticously reporting assets: http://www.gutenberg.org/ebooks/26330 http://www.gutenberg.org/ebooks/26330 Had the author written the book today, he would compare the practice to quantitative easing or injecting liquidity: http://en.wikipedia.org/wiki/Quantitative_easing http://en.wikipedia.org/wiki/Quantitative_easing The big difference? Amalgamated Copper was a private entity whose owners used fraud and banks to print them millions of dollars.

AsymetricCom 13y ago

We should start a thread about how ignorant you were before this awesome guide. I'm sure we can talk about all sorts of stupid things people believe while managing to learn nothing beyond the scope of the very basic article.

pistle 13y ago
I liked how candid they were in their post and then you made all my malcontent proclivities surface. Now, I'm out to pile on and ruin their day as well. Blood in the water.
JshWright 13y ago
Apparently I've triggered some deep seated angst... Let me try to clarify what I meant, and maybe you'll feel better? This post didn't present any new 'facts' for me. I was already aware of all the details he explained (and most, but not all, of the implications of those details). My point was simply that by framing shares as currency presented them in a way that I had never considered before, and that comparison caused a number of other things to 'click.' My apologies if my learning offended you...
- adwf 13y ago
  I think it's safe to say he's just being unpleasant for the sake of it. The old adage of "If you've got nothing nice to say, don't say anything at all." springs to mind. I thought that shares as currency was an interesting analogy to draw too. Although I guess when you get down to it, anything that's reasonably fungible can be considered currency if you feel like it.
  - AsymetricCom 13y ago
    We should definitely not criticize, yes, unless we can provide some kind of positive feedback. I agree. I like how the article had good words in it. We should endeavor to make more articles with good words.
- AsymetricCom 13y ago
  Not at all, now that I've learned about your learning, we can all discuss how happy that makes us feel. It's a win-win. Wait, maybe if there was a higher context to share our approval of the article without distracting away from its content? Like some kind of high-level rating system that was enforced through a framework of some sort and presented as a low-friction indicator of the quality of the article? We could even improve it by presenting the highest quality articles above the fold. Of course then content that appealed to the lowest common denominator would become the most approved, and people could congregate around shared understanding and beliefs, further cementing those ideas as the "right ideas". Only if there were some social rules that would prevent this "circle jerking" behavior that causes forums to devolve into roaming bands of up-vote brigades. We could start by not "circle jerking" about the quality of the article, we could probably go a long way toward reducing congratulatory posts that celebrate elementary-level understanding of economic systems, and in turn, encourage feel good comments that are up-voted because people agree with them instead of them actually contributing anything.
  - JshWright 13y ago
    It seems I'm woefully ignorant in the ways of online forum posting... I had assumed that excerpting a specific portion of TFA and highlighting why I found it particularly insightful would have been germane to the conversation thread. If only there was a way you could have expressed your opinion that my comment didn't add anything to the conversation without resorting to sarcasm and obtuse rhetoric... (Unless you haven't crossed the 'able to down-vote threshold yet... in which case, no worries).
  - seefriek 13y ago
    Will that do anything about preventing "condescending fuckwit" behavior? I'm betting not.
  - kibibu 13y ago
    Are you ok? You seem inordinately upset about someone pointing out a particular point in the article that resonated with them.
  - trg2 13y ago
MagicWishMonkey 13y ago
I bet you're a real blast at parties, aren't ya?
- balls187 13y ago
  I hired him for our company's holiday party.

icedchai 13y ago

Curious... How did you think about stocks previously?

JshWright 13y ago
Simply as an 'ownership stake' in a company. It was easy to see how the value of the stock was tied to the fate of the company, but the comparison to currency made the risks of e.g. dilution (as compared to inflation in a currency) much more obvious.

yajoe 13y ago

Yes, many public stocks on major exchanges are just other forms of currency. It just depends on whether the underlying asset is highly liquid (which implies easy to trade, confidence it will exist in short and long terms, etc). I would humbly submit not to get hung up on the word 'virtual' since the practice of using stocks as a liquidity source (and at times to actually print money) have been done a few times in the past. My favorite example is from the 1890s: Amalgamated Copper Summary: http://www.jstor.org/stable/1884999 http://www.jstor.org/stable/1884999 Book describing the process of getting banks to print money by ficticously reporting assets: http://www.gutenberg.org/ebooks/26330 http://www.gutenberg.org/ebooks/26330 Had the author written the book today, he would compare the practice to quantitative easing or injecting liquidity: http://en.wikipedia.org/wiki/Quantitative_easing http://en.wikipedia.org/wiki/Quantitative_easing The big difference? Amalgamated Copper was a private entity whose owners used fraud and banks to print them millions of dollars.